A day before meeting his US counterpart to close the gaps for the proposed bilateral trade package, India’s trade minister Piyush Goyal on Tuesday used the BRICS platform once again to raise concern over predatory pricing techniques used by some e-commerce companies in India.
“I would like to highlight the adverse impact of predatory pricing indulged by some e-commerce players which adversely impact millions of small retailers. It is important for e-commerce to follow the letter and spirit of the law," Goyal said at a session titled “Advancing BRICS Trade and Investment Cooperation—the road ahead" at the BRICS trade ministers meet in Brazil.
Prime Minister Narendra Modi will take part in this year’s BRICS summit to be held on Wednesday and Thursday in Brazil. The summit’s theme is ‘Economic growth for an innovative future.’
Speaking at the US-India Strategic Partnership Forum last month, Goyal said India and the US have agreed on the broad contours of a proposed trade deal and may announce it after closing the pending gaps.
“It’s just posturing. The minister is trying to create leverage ahead of his meeting with USTR Robert Lighthizer," a trade expert said speaking under condition of anonymity.
Last month, ahead of the Maharashtra elections, Goyal had said the government will take the strictest action against e-commerce companies if they are found to be violating India’s e-commerce policy.
“The central government has made clear cut guidelines in e-commerce. We have made it clear that if anybody tries to use the route of multi-brand retail, then strict action will be taken. E-commerce is a marketplace platform. E-commerce companies have no right to discount their products. They have no right to harm small retailers by using the method of predatory pricing," Goyal said in Mumbai.
After complaints from brick and mortar retailers alleging predatory pricing and deep discounting by online retailers during their ongoing festive sales, senior officials of the Department for Promotion of Industry and Internal Trade (DPIIT) met representatives of Amazon and Flipkart to gain their responses. Both companies have maintained that they are fully compliant with Indian laws. Confederation of All India Traders (CAIT) secretary general Praveen Khandelwal had alleged that e-commerce companies are following unethical business models and violating foreign direct investment norms. It alleged that online retailers are influencing prices and creating an uneven playing field.
In a statement last month, CAIT said a delegation of traders led by Khandelwal met minister Goyal who in turn assured that if the alleged unethical business practices are proven, the government may order an investigation.
The Federation of All India Vyapar Mandal, another body of offline traders also said in a statement last week that they made a similar complaint to Goyal on 3 October. It alleged that e-commerce companies are also offering instalments to attract more and more customers due to which the traditional retail market and business are being adversely affected.